Thales Shares: 3.31% Decline Following the Defense Sector
The unexpected announcement of a summit between Donald Trump and Vladimir Putin scheduled in the next two weeks in Budapest has weighed on the entire European defense sector this Friday, October 17. The prospect of renewed dialogue between the two leaders has revived speculations of a possible ceasefire in Ukraine, prompting investors to take profits on stocks that have significantly risen since the start of the year. Thales, along with its European peers such as Rheinmetall, Leonardo, or BAE Systems, experienced this wave of profit-taking, as traders anticipate a possible de-escalation of geopolitical tensions that had until now supported the demand for military equipment.
Closing Performance
The stock closed the session at 245.40 euros, down 3.31% from the previous day when it was trading at 253.80 euros. This movement is part of a weekly correction of 6.62%, marking a contrast with the annual performance which remains spectacular at +61.29%, far exceeding the CAC 40's gain of 9.11% over the same period. Trading volumes remained moderate with only 0.11% of the capital traded, suggesting that the downward movement was not accompanied by massive selling pressure but rather a technical adjustment in a Parisian market that itself ended slightly down by 0.18%.
Technical Analysis
Technically, the price is now at the lower boundary of the Bollinger Bands, set at 245.41 euros, a level that represents a natural support zone after the weekly decline. These bands, which frame price fluctuations based on recent volatility, show that the correction has reached its lower extreme without breaking it. Meanwhile, maintaining above the 200-day moving average, located at 231.14 euros, confirms that the underlying trend remains bullish. This average, calculated over the last ten months, serves as a benchmark to assess the strength of a long-term trend and offers a safety margin of more than 14 euros, approximately 6% below the current prices, thus limiting the risk in case of further declines.
Market Sentiment
This correction comes just days after Oddo BHF raised its price target from 275 to 290 euros on October 13, maintaining its buy recommendation. The analyst justified this revision with solid order intakes in the third quarter and enhanced visibility over the coming months. The consensus among analysts sets an average target at 278.25 euros over three months, reflecting an upside potential of more than 13%, which contrasts with the downward movement observed this week across the sector, as investors opt for caution in light of the prospects for de-escalation of the Ukrainian conflict.
